Sequels to ObamaCare: ScottCare, ShumlinCare and More Take Stage

by Dan Diamond, California Healthline Contributing Editor

TOPIC ALERT:

National momentum to overturn the Patient Protection and Affordable Care Act may be at its lowest ebb since the law was passed last year.

  • Every new House GOP effort to strike down the health reform overhaul is met with an immediate counterpush from the Senate.
  • Two Virginia-based lawsuits that question the law's constitutionality have been routed to appeals court judges nominated by Democratic presidents, suggesting that they will render decisions that uphold the overhaul.
  • Meanwhile, the White House is enjoying an upsurge in popular support, with the president's poll numbers spiking in the wake of Osama bin Laden's death.

Taken together, it's a tough climate for opponents of PPACA.

But it also affirms that the action on the law is in the states, where officials are getting a chance to shape health reform in ways that President Obama could or would not.

Here are three states where new governors are making major decisions that either advance or break with the new federal law.

1.) Vermont Tries To Climb Mountain of Single Payer

Rather than simply carry out national health reforms, Vermont is on the verge of enacting a far-reaching plan to adopt a single-payer health care system.

A fast-moving bill before Democratic Gov. Peter Shumlin would create a state health insurance exchange as required under the federal health reform law, establish a publicly financed single-payer system and allow enrollees to purchase supplemental private insurance policies. Shumlin advocated for such a system during his election campaign in 2010 and has indicated that he will sign the legislation.

According to Kevin Outterson -- an associate professor at Boston University and writer for The Incidental Economist -- the state's single-payer plan has attracted some powerful champions. BlueCross BlueShield of Vermont, which is the state's largest insurer, is backing the proposal in hopes of taking responsibility for the new payment system. The Vermont Medical Association and Vermont hospitals also support the measure, Outterson adds.

Vermont already is perceived as having good public health care -- Commonwealth Fund ranks the state among the nation's 10 best performers with respect to health care access -- and the bill would help cover the nearly 50,000 state residents who lack insurance.

Many states have considered single-payer models, although hesitated to make the move; California has flirted with enacting legislation several times before. So officials across the nation will be watching Vermont's plan closely -- and with particular interest on whether the model will hold down costs.

The bill doesn't offer details on how the framework will be funded, although Outterson notes that Vermont would deploy a version of the federal Independent Payment Advisory Board with "incredible power" to control spending. Vermont also plans to ask for federal waivers that would create flexibility around its Medicaid spending and, unusually, its Medicare population, too.

2.) After Accepting Grant, Oklahoma Soon Decides To Go It Alone

At the other end of the spectrum, Oklahoma is making moves to reject the overhaul and limit the state's participation in administering health care.

Gov. Mary Fallin (R) last month announced that her state would return a $54.6 million HHS Early Innovator Grant, intended to help create an information technology infrastructure for the health insurance exchanges mandated under the health reform law.

Oklahoma officials instead say they will use funds from state and private resources to create a "private enterprise network" that is designed to use a free-market approach to purchasing health insurance. The network will be governed by members of the private sector and chaired by the State Insurance Commissioner John Doak.

Fallin's move speaks to many GOP governors' fears that the reform law is an unfunded mandate -- and that states will end up holding the bag. By returning the grant, Oklahoma is moving toward a "defensive strategy" against the federal overhaul that encourages free-market principles and will better use the power of the private sector, GOP State Senate President Pro Tempore Brian Bingman said.

3.) Florida Shines Light on HMO Model for Medicaid

Florida Gov. Rick Scott (R) also remains a leading opponent of federal health reforms, after emerging in March 2009 as an early critic of Democrats' health reform legislation. Like Oklahoma, Florida has rejected several federal grants intended to speed the law's implementation since Scott took office.

But that doesn't mean Scott is averse to all health reform. His state is ready to make a transformative change to its $21 billion Medicaid program.

Scott is backing a compromise bill (HB 7107, SB 1972) that would shift nearly three million state Medicaid beneficiaries to managed care plans beginning in 2012. The measure would allow Florida to decide how much to spend annually on Medicaid and to share in the profits of managed care companies if they are greater than 5%.

The bill would eliminate the current fee-for-service system, and the state and managed care companies would determine which services would be covered. Beneficiaries would pay $10 monthly premiums and would be charged $100 if they visit an emergency department for nonemergency care.

As with Vermont's single-payer experiment, other states will be closely watching to see if Florida's measure tamps down its health spending. According to Scott, the changes would save his state $1.1 billion within the first year.

However, Florida still needs federal waivers to carry out the overhaul's provisions and it is unclear whether CMS will back the changes. The agency last month sent a letter to Florida lawmakers saying that the federal government will withhold approval until it receives more state details on the initiative. CMS also said that Florida must mandate that participating managed care plans abide by new medical-loss ratios, where they spend a certain percentage of money they receive on patient care.

Of course, there's at least one other state where a new governor has assumed a pivotal role in health care reform: California. An upcoming "Road to Reform" will go deeper on how the overhaul is playing out in the Golden State. Meanwhile, here's a look at what else is making news around the nation.

Rolling Out the Reform Law

  • Last week, a group of state insurance regulators, health industry representatives and consumer advocates agreed to begin soliciting public input on and conducting testing of new "coverage facts labels" that the federal health reform law requires health plans to include. The labels -- which the group is developing under the direction of the National Association of Insurance Commissioners -- initially will offer pricing information for maternity care, treatment for diabetes and breast cancer. Under the reform law, all insurers that sell group or individual health plans are required to provide the benefits summaries and the three conditions' labels by March 2012 (Jaffe, Kaiser Health News, 5/5).
  • The Robert Wood Johnson Foundation has announced plans to help states implement provisions from the federal health reform law aimed at expanding health care access to uninsured populations. The foundation plans to provide technical assistance to help states set up health insurance exchanges, expand Medicaid and streamline eligibility and enrollment systems. The first 10 states that the foundation will target with the program are Alabama, Colorado, Maryland, Michigan, Minnesota, New Mexico, New York, Oregon, Rhode Island and Virginia (Vesely, Modern Healthcare, 5/7).
  • Enrollment in the high-risk insurance pools created by the federal health reform law has more than doubled since 2010, but is still well behind initial estimates for enrollment. More than 18,000 U.S. residents now have enrolled in the Pre-Existing Condition Insurance Plan -- up from 12,500 individuals in February, but still behind administration estimates that more than 250,000 people eventually would enroll. An HHS spokesperson said the agency is looking for ways to boost enrollment in the program (DoBias, National Journal, 5/5).
  • The number of uninsured U.S. residents between ages 18 and 26 has dropped by about four percentage points since 2010, according to a Gallup-Healthways Well-Being Index poll released last week. The poll found that 24% of young adults in the U.S. currently are uninsured. In 2010, 28% of people in that age group reported being uninsured, down from 28.6% in 2009 and 27.2% in 2008. The results follow a report that more than 600,000 young adults are taking advantage of a provision in the federal health reform law that allows them to remain on their parents' health insurance plans until age 26 (Norman, CQ HealthBeat, 5/4).

On the Hill

  • On Tuesday, the House Energy and Commerce Committee marked up a bill (HR 5), by Rep. Phil Gingrey (R-Ga.), that would cap pain and suffering awards in medical malpractice lawsuits. The markup will continue on Wednesday morning, when most of the attempts to modify the bill will be discussed. The legislation is part of an effort by House Republicans to replace the federal health reform law, but it is not likely to pass the Democrat-controlled Senate. Although President Obama has indicated that he supports changes to the medical malpractice system, he opposes Gingrey's measure (Ethridge, CQ Today, 5/9).
  • Last week, the House voted 251-175 to approve a bill (HR 3) that would expand and make permanent restrictions on federal funding for abortion except in a few cases. The closed rule includes language for automatic adoption of a substitute amendment using language from a related bill (HR 1232), which would block women from deducting the cost of abortions as a medical expense and ban tax credits from the federal health reform law for insurance that covers abortion. The legislation is not expected to pass the Democrat-controlled Senate, and President Obama has threatened to veto it if it arrives at his desk (Hennessey, Los Angeles Times, 5/5).

In the States

  • Last week, the Florida House passed a proposed constitutional amendment (HJR 1) that would exempt the state from implementing the individual mandate in the federal health reform law. The measure passed the state Senate last month and will go before voters as a ballot measure in November 2012 (Fung, National Journal, 5/5).
  • Between 15 and 20 states have introduced legislation this year to join an interstate compact, which would create health care regulations that override the federal health reform law. The not-for-profit Health Care Compact Alliance has provided a number of states with a proposal that it says "provides a legal framework within which states can create their own health care systems." However, Congress and HHS have not yet determined whether states actually will be able to act on these health care compacts. The overhaul requires states to prove that their alternative system would provide the same quality at a similar price for the same number of people (Fung, National Journal, 5/3).

In the Courts

  • Three judges on a panel in the Fourth U.S. Circuit Court of Appeals in Richmond, Va., that on Tuesday heard oral arguments in two separate Virginia-based lawsuits that question the constitutionality of the federal health reform law were nominated by Democratic presidents. The judges were randomly selected to hear the case. They are Judge Diana Gribbon Motz, the presiding judge, who was nominated by President Clinton; Judge Andre Davis, who was nominated by President Obama; and Judge James Wynn, who also was nominated by Obama. So far, all the judges who have ruled on lawsuits challenging the reform law have done so along party lines. Judges appointed by Democrats have declared the overhaul constitutional, while judges appointed by Republicans have not (Haberkorn, Politico, 5/10).

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